More Money For Terror? Pakistan Finds Another Lifeline In Form Of $2.2-Billion Chinese Loan

The State Bank of Pakistan (SBP) has received US 2.2 billion from China, according to a tweet by the central bank on Monday.

This deposit would provide relief to the dwindling foreign exchange reserves of Pakistan and strengthen it for the time being against a critical situation of balance of payments.

After a meeting in Beijing between Chinese Premier Li Keqiang and Prime Minister Imran Khan in November 2018, China had said that it was willing to offer assistance to Pakistan to help it weather its current fiscal woes. However, no details had been divulged about the nature and quantum of assistance then.

The terms of the package had remained elusive until last week when the Ministry of Finance had announced that the SBP would receive a 15 billion yuan loan, equivalent to $2.1 billion, from China by Monday (25 March 2019).

Finance ministry adviser and spokesperson Dr Khaqan Hassan Najeeb had said that "all procedural formalities" for the transfer of the loan being provided to Pakistan by the Chinese government have been completed, and "the funds will be deposited in the SBP account by Monday, March 25".

The SBP reserves stood at $8.84 billion as on March 15, 2019, according to the central bank’s latest weekly report. These include financial assistance packages extended to Pakistan by Saudi Arabia ($3 billion) and United Arab Emirates ($2 billion). The latest deposits came from Beijing are expected to boost the SBP reserves into double digit after a gap of almost one year.

In addition to this, Saudi Arabia has also promised a $3 billion petroleum oil supply on deferred payment for Pakistan.